Debt Settlement Scam Attorney — Recover Illegal Fees
If a Debt Settlement Company Took Your Money and Failed to Deliver, You May Have a Legal Claim to Recover Every Dollar.
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Signs of a Predatory Debt Relief Company
Each of these red flags may constitute a violation of federal or state law that supports a legal claim for recovery.
Upfront Fees Before Results
Under the FTC's Telemarketing Sales Rule, for-profit debt settlement companies are prohibited from charging fees until they have actually settled or reduced at least one of your debts.
High-Pressure Sales Tactics
"This offer expires today" or "we can only guarantee this rate right now" — legitimate companies provide written disclosures and give you time to review.
Told You to Stop Paying Creditors
Without clearly explaining the risk of lawsuits, additional interest, penalty fees, and significant credit damage.
Guaranteed Specific Results
No company can guarantee they will settle debts for "pennies on the dollar." Creditors are under no obligation to negotiate.
No Written Documentation
No clear contract, no written explanation of services, no detailed breakdown of fees or projected timelines.
Claimed Special Creditor Relationships
This is almost always fabricated. Creditors do not give preferential treatment to debt settlement companies.
Cut Off Creditor Communication
Instructed you to stop all communication with creditors — isolating you from critical information about lawsuits, judgments, and collection activity.
Undisclosed or Escalating Fees
Maintenance fees, monthly service charges, or percentage-based fees that ultimately consumed most of what you saved.
The Process
From harassment to compensation in three simple steps.
Free Review
We analyze your case at no cost
We File Suit
We take legal action against violators
You Get Paid
Receive compensation for violations
If a debt settlement company took your money and failed to deliver results, you may have a legal claim to recover every dollar you paid — and potentially more.
Hyslip Legal represents consumers nationwide who have been victimized by predatory debt settlement and debt relief companies. Our debt settlement scam attorneys pursue claims under federal and state law to hold these companies accountable and get your money back.
There are no upfront costs and no fees unless we win.
How the Scam Works
Debt settlement scams follow a predictable pattern. Understanding how they operate can help you recognize what happened — and why you have legal grounds to take action.
The Pitch
A company contacts you — or you find them online — promising to negotiate your debts down to a fraction of what you owe. They sound professional, confident, and reassuring. They may claim partnerships with creditors or guarantee specific results like settling your debt for "pennies on the dollar."
The Setup
You sign a contract and begin making monthly payments into a dedicated account. The company tells you these funds will be used to negotiate settlements with your creditors. In many cases, you are told to stop paying your creditors directly and to cut off communication with them.
The Drain
Instead of negotiating on your behalf, the company siphons your payments through fees — enrollment fees, monthly maintenance charges, or percentage-based service fees. Little or none of your money goes toward actual debt settlement.
The Fallout
Because you stopped paying creditors, your debts grow. Interest compounds. Late fees pile up. Your credit score drops. Creditors may file lawsuits or sell your accounts to aggressive debt collectors. If a debt settlement company caused inaccurate information to appear on your credit report — or failed to correct errors it caused — that may also constitute a violation of the Fair Credit Reporting Act (FCRA). Our attorneys evaluate these overlapping claims to maximize your recovery.
The Disappearance
Eventually the company stops returning your calls, closes its doors, or rebrands under a new name — leaving you deeper in debt than when you started, with nothing to show for the thousands you paid them.
If this sounds familiar, you are not alone — and you have legal options.
Is this happening to you?
You may be entitled to compensation of $500–$1,500 per violation.
Call Us NowThe Law: No Results, No Fees
The Federal Trade Commission's Telemarketing Sales Rule (TSR) is the primary federal law governing debt settlement companies. Under 16 C.F.R. § 310.4(a)(5)(i), for-profit debt relief companies that contact consumers by telephone — or are contacted by consumers in response to advertising — are prohibited from charging fees before they have:
- Successfully settled or reduced at least one of the consumer's debts, and
- The consumer has made at least one payment on that settlement or debt management plan.
This means the business model of most predatory debt settlement companies — collect monthly fees while doing little or nothing to resolve your debts — is a direct violation of federal law. If a company charged you fees without first delivering a settlement result, that company broke the law and you have a right to recover those fees.
Did a Debt Settlement Company Take Your Money?
You may be entitled to recover every dollar you paid — plus additional damages. Get a free, no-obligation case review.
State Laws That Protect Debt Settlement Victims
The FTC's Telemarketing Sales Rule is the primary federal tool, but many states have enacted their own consumer protection statutes that provide additional rights — and in some cases, stronger remedies including double or treble damages.
Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA)
The Illinois Consumer Fraud Act (ICFA) prohibits unfair or deceptive acts in trade or commerce. A debt settlement company operating in Illinois that misrepresents its services, charges illegal fees, or uses deceptive sales tactics could face liability under the ICFA. The ICFA allows consumers to recover actual damages, and courts may award punitive damages and attorney's fees.
Ohio Consumer Sales Practices Act (OCSPA)
The Ohio Consumer Sales Practices Act prohibits unfair, deceptive, and unconscionable consumer sales practices. Ohio courts have applied the OCSPA to debt relief companies that mislead consumers about fees, timelines, or likely outcomes. Violations can result in treble damages in some circumstances.
Similar statutes exist in Florida, Pennsylvania, Texas, California, and most other states. The specific laws that apply depend on where you live and where the company operates. View all state consumer protection laws we work with.
At Hyslip Legal, we evaluate every case for both federal TSR violations and applicable state claims. Filing under multiple statutes increases pressure on the company and can significantly increase your total recovery.
What We Can Do For You
When you contact Hyslip Legal, we review your case at no cost and with no obligation. If we identify violations, we take action — filing claims under federal and state law to recover the fees you were illegally charged, pursue additional damages where available, and hold the company accountable.
Recover Illegal Fees
We pursue claims to get back every dollar you paid in illegal upfront or monthly fees under federal and state law.
Additional Damages
Depending on applicable state law, courts may award statutory damages — some states allow double or triple damages for willful violations.
Federal & State Claims
We evaluate every case for both TSR violations and state consumer protection claims. Filing under multiple statutes maximizes your recovery.
No Cost to You
We handle cases on a contingency basis. You pay nothing upfront — under most consumer protection statutes, the company that violated the law pays your attorney's fees.
We help clients across the United States. Our attorneys understand both the federal Telemarketing Sales Rule and the state-specific consumer protection statutes that may apply to your situation.
Frequently Asked Questions
What is a debt settlement scam?
A debt settlement scam occurs when a company promises to negotiate your debts for a reduced amount but charges you substantial fees without ever settling your debts — or without delivering the results they promised. Many of these companies violate federal law by collecting fees before achieving any settlement on your behalf.
How do I know if my debt settlement company is legitimate?
A legitimate debt settlement company will never charge you fees before settling at least one of your debts. It will provide clear written disclosures about its fees, the risks of its program (including credit damage and potential lawsuits from creditors), and realistic timelines. If your company did not do these things, it may have violated the law.
Can I sue a debt settlement company?
Yes. If a debt settlement company charged you illegal fees, made false promises, or engaged in deceptive practices, you can file a lawsuit under the FTC's Telemarketing Sales Rule, your state's consumer protection act, or both. An attorney can evaluate which laws apply to your specific situation.
What damages can I recover?
You may be able to recover the full amount of fees you paid, plus additional compensation for financial harm caused by the scam — such as increased debt, damaged credit, or higher interest rates. Depending on applicable state law, courts may award statutory damages, and some states allow double or triple damages for willful violations. Attorney's fees are also recoverable under most consumer protection statutes.
What should I do first if I think a debt settlement company scammed me?
Stop making any further payments to the company. Gather all contracts, account statements, payment receipts, and any written or recorded communications. Do not ignore any lawsuits from creditors — the fact that you were scammed does not eliminate the underlying debts. File a complaint with the FTC at reportfraud.ftc.gov and with your state attorney general's office. Then contact a consumer protection attorney who can evaluate whether the company violated federal or state law.
How long do I have to sue a debt settlement company?
The statute of limitations varies depending on which law applies and what state you are in. Federal TSR claims and state consumer protection claims each have their own deadlines, which can range from one to six years. Because these windows vary and start running from different trigger dates, consult an attorney as soon as you suspect you have been scammed.
Can I recover damages beyond the fees I paid?
Potentially, yes. Depending on the applicable state law, you may be able to recover the full amount of fees paid, additional compensation for financial harm caused by the scam, and in some states, statutory or punitive damages. Some state consumer protection acts allow courts to award double or triple damages for willful or egregious violations.
Does hiring an attorney cost me anything?
No. Hyslip Legal handles debt settlement scam cases on a contingency basis. You pay nothing upfront and owe nothing unless we recover money for you. Under most consumer protection statutes, the company that violated the law is required to pay your attorney's fees — meaning there is zero financial risk to you.
If the same company that mishandled your debt settlement also promised to repair your credit, you may have additional claims under the Credit Repair Organizations Act (CROA). We evaluate every case for all applicable violations.
Take Action Now — Free Case Review
Every day you wait, the statute of limitations on your claims gets closer to expiring. If a debt settlement company took your money and failed to deliver, you deserve to get it back.
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